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*** Official Real Estate Forum *** (1 Viewer)
- Thread starter jeff_eaglz
- Start date
Rattle and Hum
Footballguy
I think it "depends".We are in the market to buy right now. I might pay $3000 more for a recently installed spa/hot tub (if it retailed for $10,000) compared to an identical home. To me, this would simply be another monthly expense so I figure that I could hopefully sell for $3000-4000 to someone that really wants it. This would actually allow me to have less out of pocket to get into the home.
I am waaaay too practical though.. And I admit it. Another consideration is that I am in the market for a home in the median price range of our market (170k-180k). I want our home dollars to be spent on as much home (sq footage and quality)as we can afford.
I'm sure those that have more discetionary dollars will look at a spa more favorably than me. Someone that really wants to have one would probably give it more value but the percentage of buyers paying up for such an item may be less than one thinks. I have heard the same about swimming pools.
This is probably the best non-football topic I've seen on this or any other message board. Thanks up front to Jeff E, proninja, Mike A and BnB for all their contributions. 
I am not involved in real estate, except for our personal home. Brief background -
My wife and I bought our first home together four years ago at the age of 35 (education and a previous divorce kept me from getting into home ownership earlier). We made $35,000 off our start up home when we sold it.
We just moved into our newly built home, putting all our equity into it. We already owned the land, so now we have a very nice home sitting on two acres. We purchased the three adjoining acres, giving us five acres of land with a creek on it. Our immediate plans are to keep the land as a private park, putting trails in it. There are deer, red fox, wild turkey, blue heron, etc on the land. There are new developments going up nearby and a major road improvement along the north border of the property.
Across the creek is another three acres with a small house on it. There is someone living there now. I would like to purchase a right of first refusal on the property. What is the proper way to do this?
I think all this land has great value. One, we have use of the land and a large degree of seclusion in a growing and vital city (Columbia, MO). Most of the land is zoned agricultural still, so it is very low tax base. We are just six blocks outside of the city limits or so. Two, we can sell of the lots for $25,000 - 30,000 for half acre lots. Three, we could build on the land ourselves and sell the homes or rent them. Second and third options are longer term.
I guess my questions are - How do I approach and arrange for a right of first refusal (option?) on the neighboring land? Am I placing myself at risk for some future Eminent domain if I don't develop the property? If I sell the land or build on the lots in the future, do I want to do rentals, build lower cost homes or larger homes (impact of values on my house and risk of bad neighbors)?
Sorry to throw so much at you at once. Thanks again.
Dan
I am not involved in real estate, except for our personal home. Brief background -
My wife and I bought our first home together four years ago at the age of 35 (education and a previous divorce kept me from getting into home ownership earlier). We made $35,000 off our start up home when we sold it.
We just moved into our newly built home, putting all our equity into it. We already owned the land, so now we have a very nice home sitting on two acres. We purchased the three adjoining acres, giving us five acres of land with a creek on it. Our immediate plans are to keep the land as a private park, putting trails in it. There are deer, red fox, wild turkey, blue heron, etc on the land. There are new developments going up nearby and a major road improvement along the north border of the property.
Across the creek is another three acres with a small house on it. There is someone living there now. I would like to purchase a right of first refusal on the property. What is the proper way to do this?
I think all this land has great value. One, we have use of the land and a large degree of seclusion in a growing and vital city (Columbia, MO). Most of the land is zoned agricultural still, so it is very low tax base. We are just six blocks outside of the city limits or so. Two, we can sell of the lots for $25,000 - 30,000 for half acre lots. Three, we could build on the land ourselves and sell the homes or rent them. Second and third options are longer term.
I guess my questions are - How do I approach and arrange for a right of first refusal (option?) on the neighboring land? Am I placing myself at risk for some future Eminent domain if I don't develop the property? If I sell the land or build on the lots in the future, do I want to do rentals, build lower cost homes or larger homes (impact of values on my house and risk of bad neighbors)?
Sorry to throw so much at you at once. Thanks again.
Dan
jeff_eaglz
Footballguy
And welcome to both you and Skylord, I think this is a first post in the thread from either of you.As for Skylord's question about the spa, it really does depend as Master Gators said. Not all improvements increase the value of a home. Kitchens and bathrooms (and decks, usually) are the biggest hitters for improving the value of a home, but still are often no more than 80% return on your investment.
That assumes you had a functional bathroom and kitchen before of course, and are just modernizing.
The spa is a luxury item added on, and some buyers will love it, some will say, "oh, that's nice" and a third group may even hate the idea. It really does depend.
If you want to buy one and enjoy it and intend to live there a while, by all means do so. The return on your investment is trumped (no pun intended) by your increased benefits to your lifestyle and personal enjoyment of the spa.
Even if you only get $3-4K back from a $10K investment after owning the spa for years, you still owned a spa for years, which may equal or exceed the cost of adding the spa.
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wannabee
Footballguy
Jeff, I would add that the same goes for swimming pools. Even though you might spend big bucks on a sweet pool, some potential buyers will not consider it as added value to the house. In fact, I think that a pool might not add a ton to the selling price (in comparison to the comparable price per foot), but it may help sell the house quicker to a buyer who sees the pool as a n added perk.
My $.02
My $.02
jeff_eaglz
Footballguy
RedZone / Dan,Thanks for the kind words. It looks like this thread is gaining a lot of momentum, which is fine by me. Hope we all can help those with all sorts of real estate questions.This is probably the best non-football topic I've seen on this or any other message board. Thanks up front to Jeff E, proninja, Mike A and BnB for all their contributions.
I am not involved in real estate, except for our personal home. Brief background -
My wife and I bought our first home together four years ago at the age of 35 (education and a previous divorce kept me from getting into home ownership earlier). We made $35,000 off our start up home when we sold it.
We just moved into our newly built home, putting all our equity into it. We already owned the land, so now we have a very nice home sitting on two acres. We purchased the three adjoining acres, giving us five acres of land with a creek on it. Our immediate plans are to keep the land as a private park, putting trails in it. There are deer, red fox, wild turkey, blue heron, etc on the land. There are new developments going up nearby and a major road improvement along the north border of the property.
Across the creek is another three acres with a small house on it. There is someone living there now. I would like to purchase a right of first refusal on the property. What is the proper way to do this?
I think all this land has great value. One, we have use of the land and a large degree of seclusion in a growing and vital city (Columbia, MO). Most of the land is zoned agricultural still, so it is very low tax base. We are just six blocks outside of the city limits or so. Two, we can sell of the lots for $25,000 - 30,000 for half acre lots. Three, we could build on the land ourselves and sell the homes or rent them. Second and third options are longer term.
I guess my questions are - How do I approach and arrange for a right of first refusal (option?) on the neighboring land? Am I placing myself at risk for some future Eminent domain if I don't develop the property? If I sell the land or build on the lots in the future, do I want to do rentals, build lower cost homes or larger homes (impact of values on my house and risk of bad neighbors)?
Sorry to throw so much at you at once. Thanks again.
Dan
It sounds like you have some great property(ies) in Missouri there.
The questions regarding building on them (rental properties, selling the lots, etc.) seem to contradict your quest for nature (paths, appreciation for the animals, trails, a park, etc.). So I have to answer a part of your question with another one - would you rather keep the land as it is and preserve it, or are you really wanting to build houses and create neighbors?
This may help your decision.
You own the land - and you may have to speak with a local attorney, but I believe that you should be able to sell the lots (if that is your choice) with covenants on them. That means you can put easements on the lots for trails, limit the type of development / where the house can be placed on the lot if you don't build it yourself, control how much of the lot gets cleared, etc. That way you can sell the lot and still enjoy the scenery.
As for the house across the street - offer your neighbor an option deal (yes you were correct - an option is the way to go). Give him $$ (say $1,000 or 2) for the first right of refusal on his house for if / when he decides to sell.
I'm sure we'll talk more.
Jeff, thanks for the reply and advice.Yes, you are correct that the options are conflicting - a factor that led me to seeking advice. Perhaps a little more background might help.RedZone / Dan,Thanks for the kind words. It looks like this thread is gaining a lot of momentum, which is fine by me. Hope we all can help those with all sorts of real estate questions.This is probably the best non-football topic I've seen on this or any other message board. Thanks up front to Jeff E, proninja, Mike A and BnB for all their contributions.
I am not involved in real estate, except for our personal home. Brief background -
My wife and I bought our first home together four years ago at the age of 35 (education and a previous divorce kept me from getting into home ownership earlier). We made $35,000 off our start up home when we sold it.
We just moved into our newly built home, putting all our equity into it. We already owned the land, so now we have a very nice home sitting on two acres. We purchased the three adjoining acres, giving us five acres of land with a creek on it. Our immediate plans are to keep the land as a private park, putting trails in it. There are deer, red fox, wild turkey, blue heron, etc on the land. There are new developments going up nearby and a major road improvement along the north border of the property.
Across the creek is another three acres with a small house on it. There is someone living there now. I would like to purchase a right of first refusal on the property. What is the proper way to do this?
I think all this land has great value. One, we have use of the land and a large degree of seclusion in a growing and vital city (Columbia, MO). Most of the land is zoned agricultural still, so it is very low tax base. We are just six blocks outside of the city limits or so. Two, we can sell of the lots for $25,000 - 30,000 for half acre lots. Three, we could build on the land ourselves and sell the homes or rent them. Second and third options are longer term.
I guess my questions are - How do I approach and arrange for a right of first refusal (option?) on the neighboring land? Am I placing myself at risk for some future Eminent domain if I don't develop the property? If I sell the land or build on the lots in the future, do I want to do rentals, build lower cost homes or larger homes (impact of values on my house and risk of bad neighbors)?
Sorry to throw so much at you at once. Thanks again.
Dan
It sounds like you have some great property(ies) in Missouri there.
The questions regarding building on them (rental properties, selling the lots, etc.) seem to contradict your quest for nature (paths, appreciation for the animals, trails, a park, etc.). So I have to answer a part of your question with another one - would you rather keep the land as it is and preserve it, or are you really wanting to build houses and create neighbors?
This may help your decision.
You own the land - and you may have to speak with a local attorney, but I believe that you should be able to sell the lots (if that is your choice) with covenants on them. That means you can put easements on the lots for trails, limit the type of development / where the house can be placed on the lot if you don't build it yourself, control how much of the lot gets cleared, etc. That way you can sell the lot and still enjoy the scenery.
As for the house across the street - offer your neighbor an option deal (yes you were correct - an option is the way to go). Give him $$ (say $1,000 or 2) for the first right of refusal on his house for if / when he decides to sell.
I'm sure we'll talk more.
We moved back to my wife's hometown, as her father wanted her to come back and work with him in the family business, with the goal of transitioning her into full ownership over the course of the next seven to ten years. He owns a successful excavating business. We found the land just a country block away from his house/office (the same one my wife grew up in). We bought two acres first, developed the land ourselves (building up the lot above the 100 year flood plan, taking down some trees, grading, landscaping, etc). We then purchased the neighboring three acres, so we have a wonderful buffer of trees, between us and everything else to the South, West and East. We have neighbors to the North, but with a cedar grove and the land gradient, we don't have line-of-sight with the houses. At night, we see one light, the moon and stars are brilliant. In the spring, that one light should be covered when the trees leaf out.
We love the seclusion, especially as we have not sacrificed access to restaurants, entertainment, etc. We are five minutes from the business loop and ten from the downtown area with the University of Missouri.
The road to the North is being connected with another by diverting the second road around a lagoon/lake as that area is being tied into the public sewer/waste water treatment. They are designated major arterials. We are already on public sewer/water/electric/cable.
There was an article in the utilities newsletter that growth in this area is projected to be 70% and to the East, 125%.
I am torn between realizing the monetary value of the land, the "ambiance" of nature we have and concerns over public planning officials seeing that we have this land (on the corner of a major intersection as shown on their future plans).
I would like to protect our personal property, so we have this private reserve. But I would also like to take advantage on the projected growth in the area, along with the advantage of being able to develop land due to the resources we have with the family business.
Your astute observation leads me to place that option on the neighboring land, and seek out other land nearby that we could develop cheaply, that others could not (we can take excess fill dirt to build up land in a flood plain, grading, take out trees, etc). We plan to live here for many years, and the only foreseeable reason to move would be if my in-laws passed away, and we decided to move to that land to manage the business. It is not as private and has the business assets there as well.
After that lengthy prelude, I have a question on the option. The land has a small one room house, I assume an open bedroom with efficiency kitchen and bath (it was an artist's retreat and currently occupied by the grandson of the now deceased artist) and has an assessed value of $42,000. Do we offer a set amount based upon the current value plus an annual appreciation, or assessed value by a third party assessor? I would like to structure it fairly but to my favor as much as can be done ethically. Do I need to worry about an expiration on options or can the money be recaptured if we choose not to exercise it prior to the other party deciding to sell?
rolyaTy
You're Heinous
What's the latest news on where the experts see the mortgage rates going? Will they continue to increase steadily, more slowly, more rapidly? When is the next fed meeting? I'm not too knowledgeable about what rates specifically impact house interest rates, but what is the latest news y'all have heard on the direction and timing that rates will be moving?
Rattle and Hum
Footballguy
I believe the market is pricing in another .75 basis point bump in the fed funds rate. However, these increases have not had a huge affect on long-term rates (including mortgages). Therefore, we have a negative yield curve where short-term rates are higher than long-term rates. Since bonds and rates are tradable its anyone's guess as to where long-term rates are going in the next year. I believe a 30 year mortgage is only about one point from the lowest rates posted last year.
That being said, since we are in the market for a mortgage over the next six months I am sure rates will sky rocket... it just seems to work that way for me.
Evilgrin 72
Distributor of Pain
Orlando is currently the second hottest market in the country behind Phoenix, I believe. Appreciation has been huge around here recently. I have a lease which is up October 31st and am deciding whether to renew or buy a condo/house. Do you think it's wise to buy now, or is a drop coming, making it a better decision to wait a year or so before purchasing?
Thanks.
Thanks.
Homer J Simpson
I don't push
jeff_eaglz
Footballguy
jeff_eaglz
Footballguy
Regarding your decision on the neighboring land, certainly do put restrictions on it if you do decide to sell. These can be lifted (again, it is your land) if you move, but if you decide to sell the land while you are still the neighbor, you can dictate what gets done with the land. The simplest control factor would be do develop it yourself and ensure your natural buffers between the properties by doing so. Still place easements / restrictions to keep the trails and nature a part of the area.To your question.Jeff, thanks for the reply and advice.Yes, you are correct that the options are conflicting - a factor that led me to seeking advice. Perhaps a little more background might help.RedZone / Dan,Thanks for the kind words. It looks like this thread is gaining a lot of momentum, which is fine by me. Hope we all can help those with all sorts of real estate questions.This is probably the best non-football topic I've seen on this or any other message board. Thanks up front to Jeff E, proninja, Mike A and BnB for all their contributions.
I am not involved in real estate, except for our personal home. Brief background -
My wife and I bought our first home together four years ago at the age of 35 (education and a previous divorce kept me from getting into home ownership earlier). We made $35,000 off our start up home when we sold it.
We just moved into our newly built home, putting all our equity into it. We already owned the land, so now we have a very nice home sitting on two acres. We purchased the three adjoining acres, giving us five acres of land with a creek on it. Our immediate plans are to keep the land as a private park, putting trails in it. There are deer, red fox, wild turkey, blue heron, etc on the land. There are new developments going up nearby and a major road improvement along the north border of the property.
Across the creek is another three acres with a small house on it. There is someone living there now. I would like to purchase a right of first refusal on the property. What is the proper way to do this?
I think all this land has great value. One, we have use of the land and a large degree of seclusion in a growing and vital city (Columbia, MO). Most of the land is zoned agricultural still, so it is very low tax base. We are just six blocks outside of the city limits or so. Two, we can sell of the lots for $25,000 - 30,000 for half acre lots. Three, we could build on the land ourselves and sell the homes or rent them. Second and third options are longer term.
I guess my questions are - How do I approach and arrange for a right of first refusal (option?) on the neighboring land? Am I placing myself at risk for some future Eminent domain if I don't develop the property? If I sell the land or build on the lots in the future, do I want to do rentals, build lower cost homes or larger homes (impact of values on my house and risk of bad neighbors)?
Sorry to throw so much at you at once. Thanks again.
Dan
It sounds like you have some great property(ies) in Missouri there.
The questions regarding building on them (rental properties, selling the lots, etc.) seem to contradict your quest for nature (paths, appreciation for the animals, trails, a park, etc.). So I have to answer a part of your question with another one - would you rather keep the land as it is and preserve it, or are you really wanting to build houses and create neighbors?
This may help your decision.
You own the land - and you may have to speak with a local attorney, but I believe that you should be able to sell the lots (if that is your choice) with covenants on them. That means you can put easements on the lots for trails, limit the type of development / where the house can be placed on the lot if you don't build it yourself, control how much of the lot gets cleared, etc. That way you can sell the lot and still enjoy the scenery.
As for the house across the street - offer your neighbor an option deal (yes you were correct - an option is the way to go). Give him $$ (say $1,000 or 2) for the first right of refusal on his house for if / when he decides to sell.
I'm sure we'll talk more.
We moved back to my wife's hometown, as her father wanted her to come back and work with him in the family business, with the goal of transitioning her into full ownership over the course of the next seven to ten years. He owns a successful excavating business. We found the land just a country block away from his house/office (the same one my wife grew up in). We bought two acres first, developed the land ourselves (building up the lot above the 100 year flood plan, taking down some trees, grading, landscaping, etc). We then purchased the neighboring three acres, so we have a wonderful buffer of trees, between us and everything else to the South, West and East. We have neighbors to the North, but with a cedar grove and the land gradient, we don't have line-of-sight with the houses. At night, we see one light, the moon and stars are brilliant. In the spring, that one light should be covered when the trees leaf out.
We love the seclusion, especially as we have not sacrificed access to restaurants, entertainment, etc. We are five minutes from the business loop and ten from the downtown area with the University of Missouri.
The road to the North is being connected with another by diverting the second road around a lagoon/lake as that area is being tied into the public sewer/waste water treatment. They are designated major arterials. We are already on public sewer/water/electric/cable.
There was an article in the utilities newsletter that growth in this area is projected to be 70% and to the East, 125%.
I am torn between realizing the monetary value of the land, the "ambiance" of nature we have and concerns over public planning officials seeing that we have this land (on the corner of a major intersection as shown on their future plans).
I would like to protect our personal property, so we have this private reserve. But I would also like to take advantage on the projected growth in the area, along with the advantage of being able to develop land due to the resources we have with the family business.
Your astute observation leads me to place that option on the neighboring land, and seek out other land nearby that we could develop cheaply, that others could not (we can take excess fill dirt to build up land in a flood plain, grading, take out trees, etc). We plan to live here for many years, and the only foreseeable reason to move would be if my in-laws passed away, and we decided to move to that land to manage the business. It is not as private and has the business assets there as well.
After that lengthy prelude, I have a question on the option. The land has a small one room house, I assume an open bedroom with efficiency kitchen and bath (it was an artist's retreat and currently occupied by the grandson of the now deceased artist) and has an assessed value of $42,000. Do we offer a set amount based upon the current value plus an annual appreciation, or assessed value by a third party assessor? I would like to structure it fairly but to my favor as much as can be done ethically. Do I need to worry about an expiration on options or can the money be recaptured if we choose not to exercise it prior to the other party deciding to sell?
My thought to you would be to offer fair market value to the property whenever he sells. Offer the value of the property based upon an independent appraisal. It would be fair to him and to you. Here is why.
1. He sells at "top dollar" without a commission to a realtor when he decides to sell. He also can sell "as is" without building up the place or even cleaning it up. Sign the deed over - your land.
2. You get the property you want without competition. You also get the property in "as is" condition and it will be cheap since you see the "upside" of developing the land. The small house in less than desirable condition will build in a discount to you. Certainly you can see the $$ you'll make after owning it.
Have an attorney draw up the option and record it with land records / state / county as need be. MAKE IT AS LONG AS POSSIBLE - 20+ years is not out of the question. Time shouldn't be an issue as you are stipulating how to determine future value.
The offer should also include the statement / verbage that the option will be applied to the purchase price.
It also may be prudent to agree upon an appraisal company so that there's no chance of influencing the appraisal. Can even stipulate that whomever is the appraisal company used by his favorite bank or title company. Just a fair and equitable appraisal is all you both can ask.
jeff_eaglz
Footballguy
I'll ask proninja to comment, but 75 basis points (which equals 0.75% rate increase) seems like a lot. The Fed has raised 13 x .25 over the past few years, another 3 quarters seems a bit much.Greenspan is retiring as well, so I think the Fed may just let things ride a bit.I believe the market is pricing in another .75 basis point bump in the fed funds rate. However, these increases have not had a huge affect on long-term rates (including mortgages). Therefore, we have a negative yield curve where short-term rates are higher than long-term rates. Since bonds and rates are tradable its anyone's guess as to where long-term rates are going in the next year. I believe a 30 year mortgage is only about one point from the lowest rates posted last year.
That being said, since we are in the market for a mortgage over the next six months I am sure rates will sky rocket... it just seems to work that way for me.
Regardless, mortgages haven't really watched / tracked well with the rate hikes. They have been under 7% for the past few years, varying from high 5's to mid 6's for a 30-year standard mortgage.
Another thread discussed this at length as well, with bagger adding interesting thoughts.
Is a Real Estate crash coming?
jeff_eaglz
Footballguy
If you can find a good price for a property that you like and plan on being there a while, most people agree that you should buy.Shop around and see if anyone needs to sell - it may be a buyers' market in the area soon. Just be smart and don't overpay.
No one can truly predict a drop or a rise, but if you buy reasonably in to a market you like and not the best house but a good area, you should do quite well.
You have months to watch the market. See if the houses are taking a while to sell or if "deals" are appearing. Watch for incentives from builders to buy houses. That would indicate that they are starting to fear a buyers' market.
Good luck.
Mike Anderson
Footballguy
With Greenspan gone, I'll admit to being far more Worried/Cautious. He was a godsend to RE.Be it rational or not, I'll admit that I am not as gung ho as I was. I plan on sitting back some and seeing the results before I continue to move.Just me.
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Mike Anderson
Footballguy
Back to renting:
The Family that threatened to sue me, is actually sueing me. Got a summons where they want me for $400.00 and some change. If you remember I creatively got them out, and I was not responsible for putting them in. This was where the Boyfriend was currently in jail, and the worst crime on his rap sheet was pulling a woman out of her car, beating her, and stealing the car. The Girlfriend was only slightly better.
HOWEVER, it turns out that they messed with the furnace. Electric wires were cut, and upon putting them back together with a wire nut, the Furnace works.
UNFORTUNATELY, it was not until I went over today (After not being there for some 4-5 days) to show the place that I noticed that the Furnace wasn't working, Ice was everywhere, water pipes froze, Ceilings fell, water everywhere on my Hardwood floors, the works.
The Heat is way up tonight, fans are running, and I am praying to the gods of buckling floors that these 100 year old Hard wood floors are going to be OK.
The Family that threatened to sue me, is actually sueing me. Got a summons where they want me for $400.00 and some change. If you remember I creatively got them out, and I was not responsible for putting them in. This was where the Boyfriend was currently in jail, and the worst crime on his rap sheet was pulling a woman out of her car, beating her, and stealing the car. The Girlfriend was only slightly better.
HOWEVER, it turns out that they messed with the furnace. Electric wires were cut, and upon putting them back together with a wire nut, the Furnace works.
UNFORTUNATELY, it was not until I went over today (After not being there for some 4-5 days) to show the place that I noticed that the Furnace wasn't working, Ice was everywhere, water pipes froze, Ceilings fell, water everywhere on my Hardwood floors, the works.
The Heat is way up tonight, fans are running, and I am praying to the gods of buckling floors that these 100 year old Hard wood floors are going to be OK.
Evilgrin 72
Distributor of Pain
Thanks a lot, man.
jeff_eaglz
Footballguy
Ouch. Tough break.I've been there myself more than once.
Advice to everyone - if you live in a state that can freeze and own rental property, pay someone to winterize your rental property. It is pretty simple (drain all the pipes basically and turn water off), and the $100-250 it might cost can save you thousands in repairs.
Water is one of the most damaging things to real estate imaginable - and water is inherent to working property, unlike fire. When leaks happen it can be troublesome - big leaks / floods can be devastating.
This is why I don't like rentals much any more. One flood / busted pipe can wipe out years of profits.
jeff_eaglz
Footballguy
Looking back I was a bit vague, so I hope it did help. Feel free to come back with properties you find and bounce them around here.
Flying V
Footballguy
Since homeowners insurance will cover the cost of repair, I assume the lost profit you're refering to is the deductible and the loss of rents. My State Farm agent once told me that they offered insurance to cover loss of rent money in just such an occurance. My question is; do you know any landlords that carry that kind of insurance? Would they recommend it (is it worth the extra $)?
jeff_eaglz
Footballguy
Flood insurance won't cover you if a tenant doesn't pay the heat and your pipes freeze.Frozen pipes in general are usually not covered.
Flying V
Footballguy
Now I'm a little confused. A good friend of mine went on vacation and a pipe in his upstairs bathroom broke, causing considerable damage. He was worried that without flood insurance he'd be screwed, but his policy covered it.
By the insurance company's definition, a flood can not be caused by a plumbing failure inside your home or even a hole punched in your roof during a storm.
How would frozen pipes be different from leaky ones?
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jeff_eaglz
Footballguy
Different rules apply for different insurance companies. More importantly, the rules are often different between rental property and personal residences.All that said, I need to speak with our agent.....
Pipe burst damage is covered by Homeowners almost always. Anything waterwise that comes down is generally covered.
If it comes through the pipes (toilet/sewer) the it is not covered, but most insurance have an expensive backup rider to atatch to it.
You can't get "flood insurance" without being in a government flood plain.
If it comes through the pipes (toilet/sewer) the it is not covered, but most insurance have an expensive backup rider to atatch to it.
You can't get "flood insurance" without being in a government flood plain.
The Jerminator
Footballguy
Jeff, All,
Awesome thread! I chimed in earlier about my loan and my home purchase just outside Atlanta. We are under contract and set for a Feb. 27th closing. Everything is in place except one thing: At the home inspection the inspector discovered some damage to the siding. Its an LP-knockoff pressed-board (sawdust?) siding that wasn't painted properly on the bottom edges. There is some swelling of a number of boards and the inspector categorized them as "failed."
We have asked that the seller either: 1) Repair/replace the failed boards and repaint the bottom edges of all other boards. 2) Replace the siding entirely. 3) Provide us with cash compensation such that we might get the repairs done ourselves at some later date.
The seller came back with $1,000. We said, "No." Now he has an estimate for repair/replace the bad boards and paint for $2,500. We've asked for an additional estimate.
The house just appraised for $2,000 more than we are paying.
We LOVE, LOVE, LOVE, LOVE this house and don't want to lose it. We already broke our lease to get get into the new house sooner and will be homeless inless than two weeks if we don't get this done. We close on MONDAY!!!
my question is this: How hard a brand of Hardball should I play on this matter? I want to get my money's worth but I need to get this house...
Thanks!
- Jerm
Awesome thread! I chimed in earlier about my loan and my home purchase just outside Atlanta. We are under contract and set for a Feb. 27th closing. Everything is in place except one thing: At the home inspection the inspector discovered some damage to the siding. Its an LP-knockoff pressed-board (sawdust?) siding that wasn't painted properly on the bottom edges. There is some swelling of a number of boards and the inspector categorized them as "failed."
We have asked that the seller either: 1) Repair/replace the failed boards and repaint the bottom edges of all other boards. 2) Replace the siding entirely. 3) Provide us with cash compensation such that we might get the repairs done ourselves at some later date.
The seller came back with $1,000. We said, "No." Now he has an estimate for repair/replace the bad boards and paint for $2,500. We've asked for an additional estimate.
The house just appraised for $2,000 more than we are paying.
We LOVE, LOVE, LOVE, LOVE this house and don't want to lose it. We already broke our lease to get get into the new house sooner and will be homeless inless than two weeks if we don't get this done. We close on MONDAY!!!
my question is this: How hard a brand of Hardball should I play on this matter? I want to get my money's worth but I need to get this house...
Thanks!
- Jerm
jeff_eaglz
Footballguy
I think you already know the answer to this and what affirmation, but that's okay.1. You're getting the seller to give you $1,000 against a $2,500 unexpected repair.
2. The house appraised for $2,000 more than you paid for it (used to be rare, but less now. It was always funny how an appraisal always "magically" matched the sales price).
3. Who's to say you even have to do the repair right now?
Sounds like you are getting $1,000 towards closing and $2,000 of equity just for buying the house, $3,000 more than you expected, and you have a $2,500 unexpected repair.
And you LOVE, LOVE, LOVE the house.
What was the question again?
Seriously - buy the house, fix the wallboard / siding and if you even thought about repainting anyway, here's your excuse.
BUY THE HOUSE YOU LOVE.
Even if you had to go out of pocket for $2,500 in repairs, you win in the long run.
Even if you had to finance the $2,500 on a credit card at 24%, that's $100 a month for 3 years. WORST CASE. FOR A HOUSE YOU LOVE.
Don't mean to ride you on this, but this really is a no-brainer. Let the issue die and enjoy your new home come Spring.
jeff_eaglz
Footballguy
By the way, home inspectors ALWAYS find something. That's their job. No house is perfect, even brand new ones.
I once had to get an engineering report ($600) to sell a house of mine that a mason thought needed $10,000 of repairs. The true cost was $1,000. I saved $9,000 at a cost of $600.
I once had to get an engineering report ($600) to sell a house of mine that a mason thought needed $10,000 of repairs. The true cost was $1,000. I saved $9,000 at a cost of $600.
The Jerminator
Footballguy
Its funny, as I was typing this message it was becoming clear to me how simple the solution is and how obvious my next move is.You are dead on! I think I can even get the $2,500 out of the seller.
Basically the $300 I paid the inspector got me $2,500 in return.
I just wanted to make sure I didn't get a thousand "Once the siding goes your entire home is worthless. Run, Run, RUN!!!" posts. Plus my wife would kill me if we lost this thing over a measly $2,000. Plus, surprise, surprise...she wants it painted anyways!!!
We'll put 'er to bed on Monday and not look back!
Thanks again Jeff!
- Jerm
jeff_eaglz
Footballguy
Glad I could help.Enjoy.
You are dead on! I think I can even get the $2,500 out of the seller.
Basically the $300 I paid the inspector got me $2,500 in return.
I just wanted to make sure I didn't get a thousand "Once the siding goes your entire home is worthless. Run, Run, RUN!!!" posts. Plus my wife would kill me if we lost this thing over a measly $2,000. Plus, surprise, surprise...she wants it painted anyways!!!
We'll put 'er to bed on Monday and not look back!
Thanks again Jeff!
- Jerm
Jeff,
Dan here from Missouri. I have a question about zoning if I can throw that at you (or Mike and BnB). To revisit the property, we have a new home on two acres with a bordering creek that is zoned R-1 (residential) and just picked up the neighboring three acres that is currently zoned A-1 (agricultural). The tax rate for the agricultural is very reasonable (less than 10 dollars a year for three acres) whereas the residential land tax for the two acres was 191 dollars prior to development/building.
Of the original two acres, about one acre is in the flood plain and has a powerline easement through it, preventing any real improvements upon that ground. Would it be worth my while to try to get that acre zoned agricultural (it is continuous with the A-1 land)? Or do I risk having all five acres zoned R-1? Our use for the three A-1 acres is to make a private park. It is zoned A-1 because this area was a farm/ranch a generation or two back.
I figure I would be saving at most $100 a year, but if there is no risk and little cost, I would rather keep than spend the $100.
Thanks
Dan here from Missouri. I have a question about zoning if I can throw that at you (or Mike and BnB). To revisit the property, we have a new home on two acres with a bordering creek that is zoned R-1 (residential) and just picked up the neighboring three acres that is currently zoned A-1 (agricultural). The tax rate for the agricultural is very reasonable (less than 10 dollars a year for three acres) whereas the residential land tax for the two acres was 191 dollars prior to development/building.
Of the original two acres, about one acre is in the flood plain and has a powerline easement through it, preventing any real improvements upon that ground. Would it be worth my while to try to get that acre zoned agricultural (it is continuous with the A-1 land)? Or do I risk having all five acres zoned R-1? Our use for the three A-1 acres is to make a private park. It is zoned A-1 because this area was a farm/ranch a generation or two back.
I figure I would be saving at most $100 a year, but if there is no risk and little cost, I would rather keep than spend the $100.
Thanks
Mike Anderson
Footballguy
If you didn't notice it until now, I am going to go out on a limb and say that it doesn't need to be repaired right now. Take the extra grand, fix up the inside, and slowly set aside funds to repair the outside for 3 years from now. If you are appreciating at the rate you say you are, do a HELOC in a couple of years. I would bite almost any bullet for my own PERSONAL dream house.
Mike Anderson
Footballguy
I only basically buy as is. I want a low price, and can do whatever repair myself.That said, for the couple of times I needed to make a deal go away, or become a much better deal, I have an Inspector on Speed Dial that can kill any deal. The guy is an absolute ball buster. He will walk in with the smallest fine tooth comb you ever saw and fine $100K in repairs at the drop of a hat.
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jeff_eaglz
Footballguy
Short answer? Probably not worth the hassle.To turn 1/2 of your lot into Ag vs. Residential, you're going to have to subdivide it OR re-draw the boundaries of the two lots.
At the least this will cost you $$ for engineering / surveying, recording, etc. etc.
Even if it is just $500 - why?
$500 spent today to make $100 over 7 years (save, rather) is about 9% return on your investment.
I bet it might be more like $1000 and of course hassle.
Plus if / when you sell the house, the house's value will decrease since you lost the land that was put in Ag. That's the bigger issue.
Future owners may want / need 2 acres for whatever they want to do.
jeff_eaglz
Footballguy
That's so wrong, but I love it anyway.
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boomer
Footballguy
Jeff,
I live in Maryland and believe I read somwhere that you do as well. Here is a brief overview of my situation. Last fall we purchased a new home which in currently under construction using a construction loan. Our expected completion date around early May and looking to lock into a 30-year fixed rate for the perm loan. I was wondering if you can recommend any banks, including local that are easy to deal with for the permanent loan. I have been working with a bank that helped set up the construction loan with a small local bank but not confidence I want to use the large bank firm for the permanent loan.
My current house is expected to be on the market within the next week but I have also had some thought of renting the house versus selling. I am currently have around 270-280K in equity on the house that could be used for the new house.
Appreciate your thoughts or suggestions. TIA. I can PM more specifics if that helps.
I live in Maryland and believe I read somwhere that you do as well. Here is a brief overview of my situation. Last fall we purchased a new home which in currently under construction using a construction loan. Our expected completion date around early May and looking to lock into a 30-year fixed rate for the perm loan. I was wondering if you can recommend any banks, including local that are easy to deal with for the permanent loan. I have been working with a bank that helped set up the construction loan with a small local bank but not confidence I want to use the large bank firm for the permanent loan.
My current house is expected to be on the market within the next week but I have also had some thought of renting the house versus selling. I am currently have around 270-280K in equity on the house that could be used for the new house.
Appreciate your thoughts or suggestions. TIA. I can PM more specifics if that helps.
jeff_eaglz
Footballguy
Yes I'm in Maryland. PM me the details and I'll be glad to help.
For those of you who rent, how do you handle a situation where you suspect/know illicit activities are taking place in one of your houses?
We learned that a duplex just two houses from our daughter's school is a crack house (one of our employee's mother is an addict who frequents the house). I looked up the property and it is owned by a couple who reside at another address, so I assume it is a rental.
I called the police station and my daughter's school, (she is on the track team and they run along that street) and neither are interested in pursuing since I only know through hearsay.
Disappointing response from the public service sector, what else can be done? Contact the landlords anonymously?
I am not sure this is a real estate question per se, but with several of you being decent people who rent out, I would like to know how you would handle it. Any other suggestions welcome by pm since I don't want to hijack this very valuable thread.
We learned that a duplex just two houses from our daughter's school is a crack house (one of our employee's mother is an addict who frequents the house). I looked up the property and it is owned by a couple who reside at another address, so I assume it is a rental.
I called the police station and my daughter's school, (she is on the track team and they run along that street) and neither are interested in pursuing since I only know through hearsay.
Disappointing response from the public service sector, what else can be done? Contact the landlords anonymously?
I am not sure this is a real estate question per se, but with several of you being decent people who rent out, I would like to know how you would handle it. Any other suggestions welcome by pm since I don't want to hijack this very valuable thread.
jeff_eaglz
Footballguy
The only bad / stupid questions are the ones not asked (at least in this thread).Even experienced real estate investors sometimes need sounding boards.
It is FAR better to have someone tell you that you are about to make a mistake than to actually make it. Especially with the big $ amounts involved usually in real estate.
The opposite is also true - getting confirmation of making a good call is reassuring.
jeff_eaglz
Footballguy
That is a fair question, but I don't believe I have a good enough answer.I strongly suggest you start a separate thread, and I'll be happy to link to it in here (or you can of course).
As in:
Good topic.
Let's talk about it at the Landlord Question thread.
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Reaper
Footballguy
So.... I looked up RE Clubs and went to an intro meeting this weekend - 8 Hours... Long Island REIC http://www.lireia.com/
As I explained to my wife who felt like we just wasted a Day and $240 - The idea behind the REIC is to Network - Not necessarily walking away with a ton of knowledge...
But - SHEESH - The meeting was totally geared to what I call HARRASSING PEOPLE... They actually advocated calling people on DO NOT CALL lists (You're not "selling" anything - Oh yeah I love when people harrass me that way)- Just to see if they want to sell their house..... They talked about contacting Lawyers about clients "In Need" who are going through Bancruptcy and Divorce - They talked about finding people in other ways going through Bancruptcy or Foreclosure....
Cold calling - Walking through neighborhoods basically LYING - Saying "Hey I was hoping to live in this neighborhood one day - know of anyone selling a house?"
Heck - I understand what they're trying to do - But, anyone calls me on a DNC list or harrasses me if I'm in dire straights and you're going to get an ear full...OH are you going to hear some choise words. This is NOT the way I want to go about Investing.... Seemed like a class on Preying on the weak and flipping or wholesaling... I'd much rather see opportunities in houses that aren't fixed up and concentrate on doing even minor things to bring up the value either doing a full or partial rehab..
I was a little Pissed off that they used most of this meeting on "Sales techniques" when we were looking for some more Meat and Potatoes.....
But, an interesting experience - I didn't join but, I may attend another one (without the wife) if/when its more focused on financing and the numbers side.
OH - One intersting yopic and web site discussed was SUB2deals.com - Which I believe we discussed here.
As I explained to my wife who felt like we just wasted a Day and $240 - The idea behind the REIC is to Network - Not necessarily walking away with a ton of knowledge...
But - SHEESH - The meeting was totally geared to what I call HARRASSING PEOPLE... They actually advocated calling people on DO NOT CALL lists (You're not "selling" anything - Oh yeah I love when people harrass me that way)- Just to see if they want to sell their house..... They talked about contacting Lawyers about clients "In Need" who are going through Bancruptcy and Divorce - They talked about finding people in other ways going through Bancruptcy or Foreclosure....
Cold calling - Walking through neighborhoods basically LYING - Saying "Hey I was hoping to live in this neighborhood one day - know of anyone selling a house?"
Heck - I understand what they're trying to do - But, anyone calls me on a DNC list or harrasses me if I'm in dire straights and you're going to get an ear full...OH are you going to hear some choise words. This is NOT the way I want to go about Investing.... Seemed like a class on Preying on the weak and flipping or wholesaling... I'd much rather see opportunities in houses that aren't fixed up and concentrate on doing even minor things to bring up the value either doing a full or partial rehab..
I was a little Pissed off that they used most of this meeting on "Sales techniques" when we were looking for some more Meat and Potatoes.....
But, an interesting experience - I didn't join but, I may attend another one (without the wife) if/when its more focused on financing and the numbers side.
OH - One intersting yopic and web site discussed was SUB2deals.com - Which I believe we discussed here.
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hydroxybear
Footballguy
Capital Gains Tax question (and by question I mean, how do I avoid paying it)
My wife and I purchased a home for $144,500 in June of 2004. We are currently buying a new construction home and settlement is set for May 2006 (or exactly 23 months after our original purchase).
Our plan was to roll all proceeds from the new home (estimated selling price of $198,000) into the mortgage of our new home.
Reading through the capital gains tax laws, it looks like I'm screwed here. I have not owned the home for more than 2 years, I am not in the armed services, I am not selling the home because I've been transferred more than 50 miles to a job, etc. etc.
Someone did suggest that I either push my original home settlement date into June (giving me the 24 months), and just get a short term loan from a bank to cover the cash needed at closing ($40,800). Does this seem like a viable option to avoid paying the capital gains tax?
If you need more info, please PM me and I can get you the details
My wife and I purchased a home for $144,500 in June of 2004. We are currently buying a new construction home and settlement is set for May 2006 (or exactly 23 months after our original purchase).
Our plan was to roll all proceeds from the new home (estimated selling price of $198,000) into the mortgage of our new home.
Reading through the capital gains tax laws, it looks like I'm screwed here. I have not owned the home for more than 2 years, I am not in the armed services, I am not selling the home because I've been transferred more than 50 miles to a job, etc. etc.
Someone did suggest that I either push my original home settlement date into June (giving me the 24 months), and just get a short term loan from a bank to cover the cash needed at closing ($40,800). Does this seem like a viable option to avoid paying the capital gains tax?
If you need more info, please PM me and I can get you the details
jeff_eaglz
Footballguy
I believe there is good news for you. You can prorate the $500,000 exemption from capital gains.Searching for a link. Proninja also mentioned this somewhere.
ETA: I may be incorrect here.
Clarifications
Looks like that the proration would be more of a "sale due to circumstances beyond your control" - not selling your house by choice.
Considering that - I'd delay the closing - even if you have to pay the mortgage two extra months. The tax savings will be huge.
DEFINITELY speak with a professional (accountant). Likely scenario is you cannot move for 2 years and a day, just to be safe.....
Good luck.
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jeff_eaglz
Footballguy
Should have addressed this post sooner.Yes there are high pressure tactics out there. Yes there are RE clubs that teach and/or push this.
If that isn't who you are or you don't like that style, it is not a problem. In fact, I like these people in a certain way as it differentiates myself. I'm not pushy nor do I bug them to sell their house(s).
There are hundreds of ways to make $$ in real estate. These techniques above are agressive and annoy many homeowners like yourself.
Most good investors that actually are successful and stick with it use other methods - usually more passive. Direct mail, advertising, word of mouth, web sites, realtors - all can be used to find deals. Six to 12 deals are a LOT in a year. Trust me on that, if you are a sole proprietor or a couple / family - this can fill your time card up quickly. With just six properties that you renovate a year, you are likely to look for a property, sell a property, and renovate one or two ALL AT ONCE. That'll keep you busy.
Find a method that works for you and your needs. There are more clubs out there.
Try www.creonline.com to look for more or Google "National REIA".
doctor Gunks
Footballguy
Yo-
First time caller. My in-laws own a mobile home in a senior citizens community, where my grandparents-in-law lived until my GIL sadly passed away last year. They're now looking to sell the mobile home (they don't own the land it's on, obviously), and they're searching for the best way to do it. My MIL found a broker, but his fee is 9%, which seems high.
She really doesn't want to do FSBO since she works full-time+ and the paperwork's a headache. Any advice? Many TIA.
-Gumksf
First time caller. My in-laws own a mobile home in a senior citizens community, where my grandparents-in-law lived until my GIL sadly passed away last year. They're now looking to sell the mobile home (they don't own the land it's on, obviously), and they're searching for the best way to do it. My MIL found a broker, but his fee is 9%, which seems high.
She really doesn't want to do FSBO since she works full-time+ and the paperwork's a headache. Any advice? Many TIA.
-Gumksf
jeff_eaglz
Footballguy
Hmm, the interesting thing here is that in most states, this really isn't even a real estate deal.Mobile homes are considered just that - mobile. DMV/MVA for each state usually record them (auto departments), not land records. If you think about it, that makes sense. No land is sold here - so there is no "real estate".
I'm not ducking the question though.
What state are we talking about? How old / young is the mobile?
Often selling a mobile home can be done best by owner financing a note and selling the note. Basically, let's say you wanted $10,000 for the mobile home.
You get a buyer to give you $2,000 for it down and you will take $350 a month for five years so they can pay it off.
NOTE - Typically you want to price the payment ($350) plus the ground rent (from the MH park) to be about equal to the price of renting a 2 bedroom apartment in the area. Just a guide there.
Back to the math.
$350 a month for 5 years is a $15,000 note at 12%. So you're selling the mobile for $17,000 at face value - but you're selling it to the buyer as a home for $350 a month. MH's and lease options are sold like cars - you sell the payments, not the price.
So Ira Investor comes along and has $8,000 that he wants to invest. He sees that you have a note, secured by a mobile home. You sell him that "income stream" of $350 a month for 60 months and you walk with $8K.
(You'll notice that Ira gets a sweet deal for his return on investment, but he is taking the biggest risk since he is taking a mobile home note which are often hard to sell, and the face value is bigger than the implied value of the mobile home).
This is just ONE option.
Realtors do exist out there, and there's quite a few investors that are involved in mobile homes. Often parks don't allow tenants, but they will allow owner financed sales. They may have to approve the new buyer.
If you have more questions, post away.
Hope that helps.
Mike Anderson
Footballguy
One of those Day seminars where you pay $120 a head, and they give you all the secrets? I should have posted sooner. Those things are a waste of time. If they could make more in Real Estate than $120 a head, they wouldn't be running the lecture.
You could easily learn just as much reading a thread like this. That one actually sounded like it had some valuable information (that I wouldn't use). Most don't.
